What’s one piece of advice new founders often get that you think shouldn’t be listened to, and why?
These answers are provided by Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most successful young entrepreneurs. YEC members represent nearly every industry, generate billions of dollars in revenue each year, and have created tens of thousands of jobs. Learn more at yec.co.
1. ‘Set Reasonable Targets and Goals’
I think the advice to set reasonable targets or goals is a bit misguided. While I believe some goals should be reasonable and achievable, you should also have some “stretch” goals that may be beyond your reach presently. This is human nature; if we always meet our goals, it prevents us from growing and achieving more and better things.
– Kyle Michaud, Experience Expositions
2. ‘Find High-Profile Investors Early On’
Some “experts” tell new founders that the best thing they can do is get high-profile investors on board before their product makes it big. I think this is terrible advice because if you spend all of your time looking for investors, you’re taking focus away from your business. What’s worse is if you form too many partnerships early on, you could basically lose control of your company.
3. ‘Follow Best Practices’
Founders should ignore the advice to follow best practices. The fact is, the best practices of businesses from the 90s are different from those of today. If you’re blazing a trail, how can you possibly take that advice? What are the best practices of podcasting or social media influencing? Note that this point only applies to creative aspects, not financial or legal dealings.
4. ‘Leave Your Full-Time Job’
Some people will tell you to leave your full-time job to start a business. I think that’s a recipe for disaster. My advice is to launch and grow your business while you still have a job. It’s time to leave when the business starts to turn a profit.
5. ‘Pursue Growth at All Costs’
New founders are often told to pursue growth at all costs and “not to worry about cash flow or profits.” That is often misinterpreted to mean that a business doesn’t need to make money. Instead, new founders should understand how they make money on a unit basis, and the level of investment required to get enough units to be profitable. Then, you can figure out a capital structure to get you there.
6. ‘Keep Your Team Lean’
One harmful piece of advice I’ve heard through the years is “keep your team lean and mean.” While it is important that you hire strong team members, hiring lean is not always the way to go. You don’t want to end up in a position where your small team is overworked. Instead of following this advice, I suggest hiring new people when you need them. This will make it easier to scale over time.
7. ‘Stick to Your Idea No Matter What’
New founders are often told to “stick to it” no matter what. This can be terrible advice, especially if their idea is bad. Good founders will have numerous ideas in their lifetime, but not all are worth pursuing. If the idea is unvetted or hasn’t gained traction after being introduced to numerous potential customers and industry experts, then it might be better to move on to a different idea.
8. ‘Sacrifice Everything to Pursue Your Dreams’
A common notion is that you should be willing to sacrifice everything to follow your dreams. However, “success” is a very nebulous concept. It’s surprisingly difficult to know when you reach “success.” I’ve found that success has shifting goal posts and is more of a process. You can be successful in different ways without throwing everything out the window.
9. ‘Start Big Right Away’
Many people will tell you to start big right away. You’ll be asked to rent a fancy office, hire a lot of employees and spend more than you can. But the truth is that it will only exhaust your budget without letting you focus on aspects that truly need your attention.
10. ‘Hire for as Low a Salary as You Can’
I’ve come across new founders being told that they should hire people for as low a salary as they can. This strikes me as a very short-sighted thing to do with the potential for things to backfire. If you can’t hire someone qualified and pay them well, you have to question whether you’re ready to run a business. You can’t compromise on quality staff and expect to succeed.
11. ‘Avoid Taking Risks’
A common piece of advice is to not take risks, and while this is solid most of the time, sometimes it’s too safe. In business, there’s no way to avoid risk to some extent. Whether it’s with your marketing plan, investors, new hires or anything else, you’ll need to think strategically about what’s worth the risk and what isn’t.